Is There a January Late-Fee Spike?

If I am someone who profits from other people paying their bills late — a big landlord, perhaps, who charges a 5 percent late fee on rents — I would have to think that January is my favorite month.

Why? So many people are traveling during late December, or having their schedules otherwise interrupted, or are perhaps afraid to open the mail at all since they’ve built up such large credit card bills, that they don’t get around to making their January payments on time. (And this is to say nothing of “breakage,” the unredeemed amount of gift cards, which also spikes this time of year; here’s what we wrote on the subject last year.)

I tend to be pretty prompt with bills myself, but January is always a tough deadline. Perhaps August is even worse, when people are also traveling?

I haven’t run across any data on late-fee monthly surges; have you? And has anyone else noticed the January (or August) problem?

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  1. Ashlie says:

    Shame on them! Although I would never know because I’m one of those charmed ones who pays her bills with auto pay and my credits never been better! Now if auto pay could only do my dishes….

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  2. Charles says:

    I could try and see if there were more late payments on the loans at my bank, but these days it seems rare if someone pays on time. An early payment might come once in a blue moon.

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  3. Justin James says:

    I always pay my bills early. And I have a policy: “pay before you play.” In other words, I don’t so much as rent a video if the bills are not paid. But I am not a typical American; I *learned* from the expensive credit and bill mistakes of my youth. The national savings rate (take out folks like Warren Buffet and Bill Gates, and it looks even worse!) shows me that I am a rarity.

    J.Ja

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  4. wb says:

    Also, US quarterly estimated taxes are due in mid-January for those of us with self-employment income. It really puts a crimp on December spending!

    The only time I’ve been late with a payment was when I was too early. I was to be gone the second half of September, so I sent in a payment on my VISA in early September. But it arrived before the billing cycle for September started – and that card has only a 14-day window from the time you receive the paper bill (21 days if you view your statement online ahead of the paper statement). As a result, they tried to charge me a late fee and interest even though the account was showing a CREDIT balance most of the month. I called 3 times before I got a live person who could reverse it. Now I have an auto-pay to pay the $15 or $30 minimum on that card in addition to me sending in the payment in their idiotic 14-day window.

    This was the same month that the company changed the envelope it sends the bill in completely – different size, shape, color, and labeling with no return address showing, looking like generic junk mail. I think they tricked a lot of people into discarding it unopened and getting late fees.

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  5. JP says:

    if the data does bear out this behavior, my initial theory for why it would occur in January is that too many people stretch their finances in December for gift giving.

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  6. Mike says:

    Tangentially, a 5% late fee on rent would probably be illegal in many states because it is not considered reasonable. Anything over circa $30 would not hold up in court.

    Of course if you pay late, the landlord can always refuse to accept payment and evict you.

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  7. WholeMealOfFood says:

    Somewhat related to this: Does everyone’s credit card bill them on (or very near) the 25th of each month? Mine does, and I’m pretty sure it is done this way just to bill for Xmas charges as quickly as possible.

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  8. Claire says:

    I know I paid my rent a week or so late this January. However, my landlord is not a money-grubber so no worries about any surcharge.
    I think January would see more lateness because not everyone can afford to go away on vacation in August (for example, us poor grad students) but at Christmas, there is much more pressure — if you go visit your parents once during the year, it’s probably going to be then.

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